R322 - How to Build a Predictably Profitable Business with Mike Michalowicz
The How of Business - How to start, run, grow and exit a small business.
Henry Lopez, Levante Business Group
4.7 • 522 Ratings
🗓️ 18 May 2026
⏱️ 37 minutes
🧾️ Download transcript
Summary
Identify what to fix next in your small business and build consistent profitability using the Profit First methodology.
Show Notes Page: https://www.thehowofbusiness.com/r322-mike-michalowicz/
Many small business owners stay trapped in survival mode because they don't know what to fix next in their business. They work long hours, constantly fight fires, grow revenue, and still struggle to achieve predictable profitability.
In this episode, Henry Lopez talks with entrepreneur and bestselling author Mike Michalowicz about how business owners can identify the right priorities, stop spinning their wheels, and build a more profitable and sustainable business.
Mike shares insights from his book Fix This Next, including his Business Hierarchy of Needs framework that helps entrepreneurs determine what their business actually needs next instead of reacting to daily crises. He also explains why many businesses mistakenly believe more sales will solve every problem when, in reality, increased sales often create more stress, obligation, and operational chaos.
Henry and Mike also dive into the core principles behind Profit First, the cash management system that challenges the traditional accounting formula of Sales – Expenses = Profit. Instead, Mike explains why business owners should prioritize profit first by allocating profit before expenses, forcing smarter operational decisions and healthier financial discipline.
During the conversation, Mike shares:
Why entrepreneurs often struggle to identify their biggest business problem.
The "A to B" exercise for determining what your business needs next.
The Business Hierarchy of Needs framework.
Why growing revenue alone often increases stress.
How Profit First changes the way owners manage cash flow.
Why most small businesses operate check-to-check.
How to begin implementing Profit First starting with just 1%.
Why profitability forces better business decisions and innovation.
The importance of validating your business model early.
Mike also shares the personal story behind creating Profit First after losing nearly everything financially following the sale of his businesses.
This episode is packed with practical insights for entrepreneurs who want to stop chasing revenue and start building a healthier, more profitable business.
Mike Michalowicz is an entrepreneur, speaker, and author. He is the bestselling author of several influential business books including Profit First, Fix This Next, The Pumpkin Plan, and Surge. Mike is also the founder of Profit First Professionals, an organization that helps accountants, bookkeepers, and financial professionals guide business owners toward greater profitability.
This episode is hosted by Henry Lopez. The How of Business podcast focuses on helping you start, run, grow and exit your small business. The How of Business is a top-rated podcast for small business owners and entrepreneurs. Find the best podcast, small business coaching, resources and trusted service partners for small business owners and entrepreneurs at our website https://TheHowOfBusiness.com
Transcript
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| 0:00.0 | Welcome to the how of business with your host, Henry Lopez, the podcast that helps you start, |
| 0:05.9 | run, and grow your small business. And now, here is your host. Mike, welcome to the show. |
| 0:14.5 | Henry, thank you so much for having me. I'm excited to have you. This is a great opportunity for me. |
| 0:19.5 | I'm a big fan of your work. |
| 0:21.7 | And so today what we're going to focus on is this challenge. Many business owners often |
| 0:25.2 | confuse about what do they need to do, what do they need to work on or fix next. And that leads |
| 0:31.2 | us to a lot of busy work, exhausting hours working in your business. But not much to show for |
| 0:37.1 | at the end of the year in a way of |
| 0:38.2 | profits. So Mike is going to share some valuable insights from his latest book and from a previous |
| 0:43.5 | book on how to determine what to fix next. Often it's about achieving predictable and consistent |
| 0:49.9 | profitability. That's often what I find most business owners are challenged with. So we're also going |
| 0:55.1 | to explore some of the key concepts from the other book I referred to, which is called Profit First. |
| 0:59.2 | It was a huge impact on me. I've implemented a lot of the philosophies in that book in the way |
| 1:04.7 | that I manage my businesses. So Mike McCallowicz is an entrepreneur, a speaker, an author, |
| 1:09.8 | and a podcaster, his podcast |
| 1:11.6 | is called The Entrepreneurship Elevated Podcast. He's the author, like I mentioned, of several |
| 1:16.5 | top selling and influential books, including Surge, Profit First, The Pumpkin Plan, and his |
| 1:22.6 | latest book, Fix This Next. He's a founder of profit first professionals. The profit first professional |
| 1:27.9 | organizations is designed to support accountants, bookkeepers and other financial professionals |
| 1:32.2 | to substantially differentiate themselves in the market by introducing a significant |
| 1:36.7 | service differentiator, which is helping their clients with these tools and techniques to maximize |
| 1:41.8 | profitability, which again is what so many of us are challenged with. |
... |
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